Feds weigh in on PPACA cost-sharing limits

Federal regulators believe that new Patient Protection and Affordable Care Act (PPACA) deductible limits apply only to insured small group plans, not to large insured plans or self-insured plans.

The regulators do believe that all group plans, including large insured plans and self-insured plans, must comply with PPACA limits on enrollees' out-of-pocket spending.

The Employee Benefits Security Administration (EBSA), an arm of the U.S. Labor Department, has presented those interpretations of PPACA in a set of answers to frequently asked questions posted on behalf of the Labor Department, the U.S. Treasury Department, and the U.S. Department of Health and Human Services (HHS) .

The departments posted the answers about PPACA cost-sharing limits to help flesh out some of plan actuarial provisions given in an HHS final rule that is set to appear in the Federal Register Feb. 25.

PPACA includes a provision that caps a group health plan deductible at $2,000 for an individual and $4,000 for a family for plan years starting on or after Jan. 1, 2014, according to analysts at Towers Watson.

PPACA also prohibits group plans from imposing out-of-pocket spending limits that are higher than the maximum limits allowed for the high-deductible plans that are compatible with health savings accounts (HSAs), the Towers Watson analysts report.

For 2013, the out-of-pocket spending limits are $6,250 for a single enrollee and $12,500 for a family.

The Labor Department, the Treasury Department and HHS said they will develop a rule that will state that "only plans and issuers in the small group market will be subject to the deductible limit."

"Until that rulemaking is promulgated and effective, the departments have determined that a self-insured or large group health plan can rely on the departments' stated intention to apply the deductible limits imposed by [PPACA] Section 1302(c)(2) only on plans and issuers in the small group market," officials said.

The departments do believe that all group plans must comply with the PPACA limits on out-of-pocket spending maximums, but they want to make life easier for employers that may use several different vendors to provide health benefits, officials said.

To help an employer that may use several different health benefits vendors with several different out-of-pocket maximum limits, the departments have come up with a transitional relief procedure.

The relief procedure will apply for an employer's first plan year starting on or after Jan. 1, 2014.

During that first post-PPACA plan year, an employer can stay in the good graces of the federal regulators if the core major medical coverage has out-of-pocket spending maximums under the new PPACA limits, and if the vendors that provide other types of coverage, such as drug coverage or pediatric dental coverage, also, separately, have out-of-pocket spending limits under the PPACA limits.

But a group plan can not set one out-of-pocket spending limit for medical benefits and a separate out-of-pocket spending limit for mental health care benefits, officials said.

In the batch of answers, officials also answered questions about the PPACA provision that requires non-grandfathered health plans to cover many basic preventive services, such as vaccinations and Pap smears, without imposing deductibles, co-payment requirements, or other cost-sharing requirements on the enrollees.

Officials said:

- A network health plan that fails to provide in-network doctors who can provide the services in the PPACA basic preventive services package must let an enrollee get those services from an out-of-network provider. In that situation, the plan cannot impose any co-payment requirements or other cost-sharing requirements on the enrollee.

- The PPACA preventive services package must include coverage for BRCA breast cancer susceptibility gene tests for women with a family history that suggests that they may be carrying a high-risk version of the gene.

- The basic package of preventive services for women includes coverage for IUDs and contraceptive implants as well as for oral contraceptives.